CBS: The Power and the Profits

However the Toynbee or the Gibbon of the future adjudges what happened to American society, he will need to reckon large with the impact of radio and television. By the 1950s, TV had become the greatest new instrument of political and social influence in the nation. How that happened, how TV became both a shaper and a creature of politics, both a maker and a prisoner of public tastes, is most simply told as the story of one broadcasting network, of its founder and indomitable chairman, William S. Paley, and the men who helped make CBS into Paley's golden candy store. David Halberstam has written that story as part of a larger work in progress about centers of power in America and the ways they have been affected by science, technology, and modern communications. This is the first of two installments.
3. Facing Up to the High Cost of Quality

The evening prime time schedule must have high viewer ratings, always higher. Neither balance nor variety was important to the process; the only criterion was ratings, how many million Americans turned on a given show. Any weak show weakened the ratings, and any strong show strengthened them. The broadcasting industry assumes that all prime time television shows cost essentially the same. Costs go up only when a show fails and the schedule has to he revised. Since advertisers pay only by circulation-cost per thousand viewers—and since the networks sell only by circulation, the stakes are very high. If one network dominates, it might earn as much as $50 million more annually in profit than either of the other networks on the same outlay. A winner like All in the Family might sell a minute for $125,000; another program at the same hour might get as little as $35,000. Since each half hour includes three minutes for commercials, a network can earn as much as $250,000 or more clear profit in thirty minutes of broadcasting time. Over forty weeks, that translates into as much as $10 million in profits. At the heart of network competition each year was this need to drive the average share of the ratings up and above that of the competitors. If the average nighttime rating for CBS was 21, and NBC got 19 and ABC 17, each point was worth millions of dollars in profit.

In the mid-sixties, a pleasant, mild CBS financial analyst named Dr. David Blank would meet with the CBS programming people and tell them in a deceptively modest manner, "Gentlemen, if present market conditions hold, I predict that if there is a strong schedule, that a point will be worth $10 million." Ten million dollars! Everyone in that room knew what that meant, most particularly Bill Paley. The pressure in that room was enormous, and it never let up; pressure not just to put on winners and to improve them but to drive off potential losers, documentaries or serious theater which might appeal only to the intelligentsia and which, with their potentially lower ratings might bring the average down. The system was brutal, and network officials often publicly complained that they were its victims. But the truth was that the networks had invented the system, and its real architect, more than anyone else, was William S. Paley. It was Paley who decided early that ratings were the heart of broadcasting, the essence of the system, and it was Paley who wanted the ratings driven up, wanted everything, not just eight of the top ten shows, not nine, but all of them. (When Mike Dann came in one day in the sixties to announce that CBS had nine of the top ten daytime shows, Paley could only grumble and say, "That damn NBC always hangs in there for one.")

From the early fifties on, Bill Paley dominated programming meetings. He was still sitting in darkened rooms at the age of seventy, watching rough cuts of a new show, critiquing it, demanding that it be better. Bill Paley at seventy still knew more about most of the shows than the younger men under him, probing for weak spots, calling his own people at midnight or 6 A.M. to talk about the show. Maybe the set looked a little cluttered, the male lead needed a different jacket and a less mod tie—not everyone lived in California—maybe a girl was too buxom for a certain show. He was always looking for weakness because a weak show meant a declining share of the audience, a drop in the rating averages, a reduction in profit.

Superprofit negated quality. Quality involved risk and perhaps a smaller share of the audience, a lower rating. Quality was for the elite, and while it was good for prestige, it was not necessarily good for the ratings. As commercial television throve, potential profits were greater. The risks, therefore, in experimenting, in offering quality programming were also greater. So fewer and fewer inspired dramas and documentaries were presented on CBS, or on other networks. There was less real accountabi1ity ability to the public; all could be blamed on ratings. There was a special quality of arrogance and isolation to the world of network executives, men who administered television but did not necessarily watch it, and it made them curiously kin to their alleged antagonists in the Nixon White House. Despite all their high-toned speeches and sophisticated corporate public relations, the essential question that guided their decisions was, Will it play in Peoria?

Those who argued for better programming, or at least more balanced programming, did not regularly penetrate the world of Bill Paley. His was a world carefully constructed so that he would not hear anything he did not want to hear nor see anything or anyone he did not want to see. If CBS was in trouble, someone else was always available to take the heat for the Chairman. Over the years it was usually Frank Stanton, the president of CBS, a man effortlessly skilled at testifying before Congress. He would journey down to Washington, practice his testimony for several days in his hotel room, and then do a star turn designed to disarm a potentially hostile investigating committee. Washington, in particular, was a city Bill Paley did not like to visit. It had little in the way of the graces he appreciated and many of the pressures he avoided. In 1962, after CBS had done a documentary on school integration called Storm Over the Supreme Court, Arthur Goldberg wanted it screened at a reception honoring his appointment to the Court, an occasion when all the justices would be present. Would someone please represent CBS at the reception? Fred Friendly, who had produced the show, mentioned the invitation to Stanton, and Stanton seemed cool to the occasion. He saw no great merit in it for himself or the Chairman. So Friendly went for CBS. Friendly later made the mistake of mentioning the reception to the Chairman, who exploded. Clearly this was a rare good occasion in Washington. What right did Fred Friendly have to represent the company? This was an occasion when the Chairman and Mrs. Paley should have been there.

Bill Paley's life was carefully and deliberately sanitized. Arthur Ochs Sulzberger of the New York Times might make himself available at dinner tables around New York to hear complaints about the paper, but those who dined with Bill Paley did not talk about The Beverly Hillbillies or Planet of the Apes or any other aspect of prime time television programming. Indeed, one of the unwritten rules of the Paley home was that one did not talk about programs at all. A few years ago, when one young family member casually mentioned how awful he thought most of the programs were, Babe Paley stomped out of the room and later accosted the young man, demanding to know how he dared to talk like that about te1evision to Bill Paley in his own home. It was, thought the young man, as if he had touched on the ultimate forbidden subject.

Bill Paley could see no one and think he saw everyone, hear no dissent and believe he was hearing it all. He could herald to this reporter the great victories of CBS during its Watergate coverage and, carried away by the expansiveness of it, and knowing that the reporter had been impressed by CBS’s Watergate stories, spread his wings wider: without CBS's coverage of Watergate, Nixon might not have fallen! CBS, he allowed himself to suggest, changed Watergate from a local to a national story! Paley's enthusiasm was contagious and seemed to imply that his own role was heroic, which it most decidedly was not. For he was conveniently forgetting that in late October, 1972, when CBS finally showed two long, tough Watergate reports on the Evening News, and Chuck Colson, acting as the White House television honcho, called Paley after the first segment to complain bitterly about it, William S. Paley had worked very hard to make the news division drop the second part. Paley had not talked at that time about the importance of taking a local story and making it national; quite the reverse. Only a special kind of heroics on the part of people in his news division, many of whom felt that their jobs were on the line, had allowed the showing of the second segment, albeit considerably cut down in length, graphics, and impact. So when this reporter quoted details of this incident back to Paley, the Chairman seemed surprised, for this was a Bill Paley the Chairman had chosen to forget and did not at the moment recognize.

In the same interview, Paley became expansive about the news division, which, he said, was what television was all about. Again the charm and warmth flowed. He had dedicated his whole life, he said, to preserving and protecting the news division from the savages who threatened it. It was his prime concern. As he talked he seemed oblivious to the fact that the role of CBS News at CBS, Inc. is a very small and limited one. Though more than 60 percent of the American people say that television is their prime carrier of the news and information, CBS, Inc. does not by a long shot think that CBS News is 60 percent of its self. Aside from the half-hour evening news show, CBS News had access to only 4 percent* of the prime time schedule (7:30 P.M. to 11 P.M. Eastern Time weekdays, 7 P.M. to 11 P.M. Sunday) in contrast to 26 percent for situation comedies, 12 percent for adventure and mysteries, and 16 percent for feature films.

Today's Bill Paley is a far cry from the young and open Bill Paley who above all was close to his reporters, the only people in the company who called him by his first name and in whose prestige he basked. Year after year the company became bigger, and as it did the role of reporters became smaller. In the eyes of the men at the top of the corporation, nothing good came from the newsroom. It produced nothing but constant trouble and occasional red ink. So it was best to keep the newsroom at a distance, to place corporate filters between Paley and the journalists. If the newsroom was not seen and not heard, then it would not seem to be asking for something or complaining about its lot. This in time became true: once the news division was not seen and not heard, it did not ask for time and space, and it did not complain.

Yet, for all that diminished status, there was a grudging respect for Paley among the older correspondents, a sense that he did care about quality in news, and above all that he was better than the generation of faceless men to come, men no longer mindful of Murrow and World War II, but loyal only to the bottom line.*

In 1973, when Bill Paley made a trip to Europe, he did something he had not done in years; he met with his correspondents. They were concerned about the future, concerned that political or other interference with CBS would surely increase. Nixon was but a symptom of what was to come. Winston Burdett, one of the last of the correspondents from the Murrow days left in Europe, asked Paley; "What about the future? You've been good to us but the pressures against the news division are terrible. What's going to happen after you've gone?" Paley answered, "I suggest you find a way for me to stick around for another twenty-five years." Not everyone who knew Bill Paley thought he was kidding.

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